The testimony has been prepared for Cook's appearance before the U.S. Senate tomorrow

Apple CEO Tim Cook's testimony on corporate tax laws has been made available on the Web just one day before he is expected to appear before the U.S. Senate.

The PDF of Cook's statement aims to defend the way Apple pays taxes and offer suggestions for a revenue-neutral reform that brings foreign profits (made by U.S. companies) back to the U.S.

The statement opens with an explanation of how Apple employs tens of thousands of U.S. citizens, and has paid "an extraordinary amount" of taxes in the U.S. According to the PDF, Apple paid nearly $6 billion in federal taxes in fiscal 2012 and the company expects to pay $7 billion in 2013.

Apple, a California company, employs tens of thousands of Americans, creates revolutionary products that improve the lives of tens of millions of Americans, and pays billions of dollars annually to the US Treasury in corporate income and payroll taxes. Apple’s shareholders – from individuals and institutions to pension funds and public employee retirement systems – have benefitted from the Company’s success through the appreciation of its stock price and generous dividends. Apple safeguards the capital entrusted to it by its shareholders with prudent management that reflects the Company’s extensive international operations. Apple complies fully with both the laws and spirit of the laws. And Apple pays all its required taxes, both in this country and abroad.

The testimony continues on to say that Apple doesn't use tax gimmicks and even describes (at length) the history of Apple. It says that Apple supports a simplification of the tax code, even if that leads to an increase in Apple’s overall corporate taxes. Apple went on to say that the current corporate tax system “applies industrial era concepts to a digital economy” and “undermines U.S. competitiveness."

The testimony goes into other specifics, such as Apple's how Apple accounts for U.S. profits, how research and developments costs are shared with its Irish subsidiary, etc.

The Irish subsidiary is an important topic because of an attack from The New York Times last year. In April 2012, NYTaccused Apple of dodging millions of dollars in taxes in California and 20 other U.S. states (and dodging billions of dollars in taxes worldwide) by routing its money through other locations. Even though Apple is based in Cupertino, California, it put an office in Reno, Nevada which allows Apple to escape California's 8.84 percent tax rate for Nevada's 0 percent. Apple has also sold digital content from low-tax countries anywhere around the world, and has used the "Double Irish With a Dutch Sandwich," which allows Apple to cut taxes by directing profits through low-cost Irish subsidiaries, the Netherlands and the Caribbean.

What does Apple want? A tax system that is "revenue neutral, eliminates all tax expenditures, lowers tax rates and implements a reasonable tax on foreign earnings that allows free movement of capital back to the US."

The Senate also released a part of its investigation today, which claims that Apple’s system of subsidiaries has allowed it to dodge $44 billion in U.S. taxes over the last four years. But the Senate also mentioned that Apple did not break any U.S. laws.

Cook and CFO Peter Oppenheimer will appear in front of the U.S. Senate Permanent Subcommittee on Investigation at 9:30 a.m. EST on May 21, 2013. The hearing is titled "Offshore Profit Shifting and the U.S. Tax Code - Part 2" and concerns corporate tax laws and profit shifting.

quote: The bottom line is: businesses do not pay taxes. Businesses sell goods and services, incurr expenses (including taxes) which they pass on to the consumer, and make profits which they pass on to owners, employees, and shareholders (all of which are then taxed again when they receive their cuts).

That's NOT the bottom line, because you are completely ignoring how even revenue neutral tax policy changes rewards some and punishes others.

If you look at the income approach to GDP, wages now compose a smaller percentage and corporate profits compose a larger percentage than they used to. A DT article recently pointed out that the net corporate tax rate is only 12%.

Low corporate taxes also discourage reinvestment. With low tax, you'd rather just keep your profits than go down a risky venture. With high corporate tax, they'll take the risk because it's a use-it-or-lose-it environment. Might as well invest/hire (tax deductible expenditures) than pay the gov't.

Apple has $145B in cash that it's doing nothing with, largely because low tax rates are giving it no reason to.

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer